Oil slips below $80 after Saudi pledges rapid output rise

*Saudi Arabia’s Energy Minister and President of the OPEC, Khalid al-Falih.

22 October 2018, News Wires — Oil slipped below $80 a barrel on Monday as Saudi Arabia pledged to raise its crude production to a record, two weeks before U.S. sanctions potentially choke off Iranian crude supplies.

Saudi Energy Minister Khalid al-Falih told Russia’s TASS news agency that his country had no intention of unleashing a 1973-style oil embargo on Western consumers but rather was focused on raising output to compensate for supply losses elsewhere, such as Iran.

Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. He added that Riyadh had the capacity to increase production to 12 million bpd.

Several U.S. lawmakers have suggested imposing sanctions on Saudi Arabia over the killing of journalist Jamal Khashoggi. The kingdom, the world’s largest oil exporter, pledged to retaliate against any sanctions with “bigger measures”.

“Oil prices are pointing lower again, with Saudi credit default swaps ballooning … as the market becomes incredibly uncertain if there will be a shift in power when the crown prince is directly linked with the Khashoggi murder,” said Stephen Innes, head of trading at foreign-exchange trader Oanda.

Brent crude futures were down 39 cents at $79.39 a barrel by 1333 GMT, while U.S. crude futures fell 45 cents to $68.67.